8-i

CHAPTER 8. NATIONAL IMPACT ANALYSIS

TABLE OF CONTENTS

8.1 INTRODUCTION .............................................................................................................. 8-1

8.2 NATIONAL ENERGY SAVINGS .................................................................................... 8-2

8.2.1 National Energy Savings Definition ....................................................................... 8-2

8.3 INPUTS TO THE NES CALCULATION ......................................................................... 8-4

8.3.1.1 Shipments.................................................................................................... 8-4

8.3.1.2 National Annual Energy Consumption....................................................... 8-4

8.3.1.3 Product Lifetime ....................................................................................... 8-10

8.3.2 Site-to-Source Energy Conversion Factors........................................................... 8-10

8.3.3 Compliance Dates and Analysis Period................................................................ 8-10

8.4 NET PRESENT VALUE (Computer Room Air Conditioners) ....................................... 8-12

8.4.1 Net Present Value Definition................................................................................ 8-12

8.4.2 Net Present Value Inputs ...................................................................................... 8-12

8.4.2.1 Total Annual Installed Cost ...................................................................... 8-13

8.4.2.2 Annual Installed Cost–Weighted by Efficiency Distribution ................... 8-15

8.4.2.1 Price Forecast............................................................................................ 8-16

8.4.2.2 Total Annual Operating Cost Savings ...................................................... 8-16

8.4.2.3 Discount Factor......................................................................................... 8-17

8.4.2.4 Present Value of Costs.............................................................................. 8-17

8.4.2.5 Present Value of Savings.......................................................................... 8-17

8.5 NES AND NPV RESULTS.............................................................................................. 8-18

8.5.1 National Energy Savings and Net Present Value Input Summary........................ 8-18

8.5.2 National Energy Savings Results.......................................................................... 8-18

8.5.3 Annual Costs and Savings .................................................................................... 8-22

8.5.4 Net Present Value Results..................................................................................... 8-23

LIST OF TABLES

Table 8.3.1 National Energy Saving Inputs................................................................................. 8-4

Table 8.3.2 Efficiency Distributions and Market Weighted-Average UECs: Small Water Cooled 

Equipment with Electric Resistance or No Heat.................................................................. 8-5

Table 8.3.3 Water and Evaporatively Cooled Equipment Market Shares by Efficiency Level, 

Base Case Used for NIA Analysis....................................................................................... 8-6

Table 8.3.4 VRF Water Source Heat Pump Market Shares by Efficiency Level, Base Case Used 

for NIA Analysis.................................................................................................................. 8-6

Table 8.3.5 Computer Room Air Conditioner Market Shares by Efficiency Level, Base Case 

Used for NIA Analysis......................................................................................................... 8-7

Table 8.3.6 Water and Evaporatively Cooled Equipment Market-Weighted Annual Average 

Energy Consumption by Standard Level (kwh/year)........................................................... 8-8

Table 8.3.7 VRF Water Source Heat Pump Market-Weighted Annual Average Energy 

Consumption by Standard Level (kwh/year)....................................................................... 8-8
8-ii

Table 8.3.8 Computer Room Air Conditioner Shipment-Weighted Annual Average Energy 

Consumption by Standard Level (kwh/year)....................................................................... 8-9

Table 8.4.1 Net Present Value Inputs ........................................................................................ 8-13

Table 8.4.2 Total Installed Cost per Unit by Efficiency Level from Life-Cycle Cost (2011$). 8-14

Table 8.4.3 Shipment-Weighted Average Total Installed Cost by Standard Level (2011$)..... 8-15

Table 8.5.1 Inputs to the NES Spreadsheet Model .................................................................... 8-18

Table 8.5.2 National Energy Savings for Water and Evaporatively Cooled Products (Quads, 

2013–2042 or 2014-2043): Based on Historical Trends.................................................... 8-19

Table 8.5.3 National Energy Savings for Water and Evaporatively Cooled Products (Quads, 

2013–2042 or 2014-2043): Shipments Fixed to 2009 ....................................................... 8-19

Table 8.5.4 National Energy Savings for VRF Water Source Heat Pumps >135,000 Btu/h 

(Quads, 2013-2042) ........................................................................................................... 8-20

Table 8.5.5 National Energy Savings for Computer Room Air Conditioners (Quads, 2012-2041 

or 2013-2042)..................................................................................................................... 8-21

Table 8.5.6. Summary of Cumulative Net Present Value for Computer Room Air Conditioners 

(Seven Percent Discount Rate) .......................................................................................... 8-25

Table 8.5.7. Summary of Cumulative Net Present Value for Computer Room Air Conditioners 

(Three Percent Discount Rate)........................................................................................... 8-26

LIST OF FIGURES

Figure 8.5.1 National Annual Costs and Savings for Efficiency Level 1 (Small Air-Cooled 

Computer Room Air Conditioners) ................................................................................... 8-22

Figure 8.5.2 Cumulative NES and NPV Results for Small Air-Cooled Computer Room Air 

Conditioners Based on a Seven-Percent Discount Rate .................................................... 8-24
8-1

CHAPTER 8. NATIONAL IMPACT ANALYSIS

8.1 INTRODUCTION

This chapter describes the method for estimating the future national energy savings 

(NES) to customers from possible efficiency levels for water and evaporatively cooled products, 

VRF water source heat pumps, and computer room air conditioners. This chapter also describes 

the method for estimating the magnitude and net present value (NPV) of the future NES for 

computer room air conditioners. Results of the national impact analysis (NIA) described here

may include, depending on equipment, national energy consumption and savings, monetary 

value of energy savings to the nation as a result of standards, increased total installed costs to 

the Nation as a result of standards, and the NPV of energy savings (the difference between the 

present monetary values of energy savings and the increased total installed costs). 

The NES for water- and evaporatively-cooled products considers the ASHRAE standard 

level as well as several higher efficiency standard levels for the eight equipment classes of 

commercial water and evaporatively cooled air conditioning equipment it analyzed. The 

Department examined various standard levels for each class of equipment, including the 

ASHRAE Standard 90.1 2010 efficiency level, the max-tech level (the highest efficiency level of 

equipment currently on the market), and several levels between. The baseline for each level is 

the current federal energy conservation standard.However, for levels higher than ASHRAE 

Standard 90.1-2010, DOE presents the energy savings as net of the savings from ASHRAE. The 

NES for VRF water source heat pumps follows the same method and analyzes two equipment 

classes of VRF water source heat pumps. However, the U.S. Department of Energy (DOE) did 

not find any models on the market below the ASHRAE Standard 90.1-2010 levels. 

DOE determined both the NPV and the NES for each potential efficiency level it 

considered for each of the 15 equipment classes of computer room air conditioners it examined. 

DOE considered four efficiency levels above the baseline efficiency level defined by the 

American Society of Heating, Refrigerating and Air-Conditioning (ASHRAE) Standard 90.1-

2010 plus one baseline efficiency level equivalent to the ASHRAE Standard 90.1-2010 level for 

each of the 15 equipment classes. DOE also included a market baseline level in the analysis 

spreadsheet. Because of the timing difference between DOE adopting standards at ASHRAE 

Standard 90.1-2010 levels as opposed to the adoption of standards of a higher efficiency level 

DOE must address the potential energy savings that could occur in the time between the dates at 

which compliance would be required. Therefore, DOE must include a market baseline efficiency 

level in its analysis of NES for DOE setting standards more efficient than those set forth in 

ASHRAE Standard 90.1-2010. DOE calculates the benefits for going higher than ASHRAE by 

analyzing the energy savings for adoption of standards at the ASHRAE Standard 90.1-2010 level 

compared with the market baseline and for adoption of more stringent standards compared with 

the ASHRAE Standard 90.1-2010 as baseline. Because DOE by statute may not adopt standards 

at efficiency levels less stringent than those specified in ASHRAE Standard 90.1-2010, it reports 

all energy and economic impacts in this analysis as potential impacts compared with adoption of 

the ASHRAE Standard 90.1-2010 baseline levels. 
8-2

DOE performed all calculations using a Microsoft Excel spreadsheet, which is accessible 

on the Internet at 

http://www1.eere.energy.gov/buildings/appliance_standards/commercial/ashrae_products_docs_ 

meeting.html.

The important facets of national energy consumption for each class of equipment include 

shipments, stock or inventory, national average electricity consumption, and the site-to-source 

conversion factor to convert the annual site energy savings into the annual amount of energy 

saved at the source of electric generation (the source energy). This chapter discusses how these 

are used in the calculation of national energy and economic impacts. Chapter 7, Shipments 

Analysis, provides a detailed description of the shipments analysis that DOE used to forecast 

future purchases of equipment.

DOE was not able to obtain information that quantified how voluntary energy efficiency 

programs affect equipment efficiencies on a national basis, but voluntary programs may increase 

the share of energy-efficient equipment prior to the implementation date of any new standards. 

Consequently, DOE did not explicitly incorporate the impact of market-based initiatives into the 

shipment forecasts detailed in Chapter 7 of this TSD.

8.2 NATIONAL ENERGY SAVINGS 

8.2.1 National Energy Savings Definition

DOE calculates annual NES as the difference between two scenarios: a base case 

(without new standards) and a standards case (with new standards). DOE develops NES 

estimates for each product class independently. Positive values of NES correspond to net energy 

savings; i.e., national annual energy consumption (AEC) with standards is less than AEC in the 

base case. For each product class and standards case, DOE calculated the total energy savings 

using a stock accounting method. The number of new shipments in any given year is assumed to 

remain in the commercial building stock for a total of the assumed lifetime of the product, at 

which point that entire year’s shipments disappears from existing stock. In this way, the total 

stock, or number of surviving units, in any given year is the sum of that year’s shipments plus the 

shipments from the previous product lifetime minus one years.

The annual base total energy use in any given year is the sum product of the shipments 

for that year and the previous product life minus one years and the market weighted average base 

UECa

Annual Base Total Energy Useyear=n = � Shipmentsyear × Base UECyear

n

year=n−(Life−1)

in each relevant year (multiplied by a site to source conversion factor). 

 a The market weighted average base UEC is based on the distribution of efficiencies under the current federal 

standards (base case). It includes products both meeting and exceeding the current federal minimum efficiency. It is 

not the UEC for a product at a specified EER.
8-3

As currently modeled, the base UEC remains constant throughout time. As a result, in the 

calculation above, Base UECyearcould be moved outside the summation terms as Base UEC.

The annual standards case total energy use in any given year is the sum product of the 

shipments for that year and the previous product life minus one years and the market weighted 

average standards case UECb

Annual Standards Case Total Energy Useyear=n

= � Shipmentsyear × Standards UECyear

n

year=n−(Life−1)

in each relevant year (multiplied by a site to source conversion 

factor). 

Prior to the analysis period, the standards case UEC is equal to the Base UEC, as 

standards have not yet become effective. Therefore, in the earlier part of the analysis period, 

energy savings accrue from only the newer units in the building stock. Later in the analysis

period, all units in the building stock will have the lower standards UEC (as they were all 

shipped within the analysis period) and will be providing energy savings.

For VRF water source heat pumps, energy savings for heating based on COP are also taken 

into account: 

Annual Base Total Energy Useyear=n

= � Shipmentsyear × (Base UECyear

n

year=n−(Life−1)

+ Base UEC_heatyear)

Annual Standards Case Total Energy Useyear=n

= � Shipmentsyear × (Standards UECyear + Standards UEC_heatyear)

n

year=n−(Life−1)

For all products, the annual energy savings is the difference between the base case total 

energy use and the standards case total energy use.

Annual Energy Savingsyear=n

= Annual Base Total Energy Useyear=n

− Annual Standards Case Total Energy Useyear=n

DOE calculated the cumulative energy savings over the analysis period by summing the 

annual energy savings for each year in the analysis period. The analysis period differs by 

product, as discussed in the next section.

 b The market weighted average standards UEC is based on the distribution of efficiencies under a given amended 

federal standards scenario. It may include products both meeting and exceeding the given amended federal standards 

level (with the exception of the Max Tech scenario, in which it is assumed that no product exceeds the amended 

federal standards level). It is not the UEC for a product at a specified EER.
8-4

Cumulative Energy Savings = � Annual Energy Savingsyear

x+29

year=x

For the ASHRAE standard, the cumulative energy savings are presented as above. For 

higher efficiency levels, the Department calculates cumulative energy savings as net of 

ASHRAE standard energy savings (water and evaporatively cooled equipment and VRF water 

source heat pumps) or uses the ASHRAE Standard as the base case in the equations shown above 

(computer room air conditioners). 

8.3 INPUTS TO THE NES CALCULATION

Table 8.3.1 lists the inputs for the determination of NES. Each of the inputs is then 

discussed below. 

Table 8.3.1 National Energy Saving Inputs

Input

Shipments

Annual Unit Energy Consumption (UEC) (quads)

Product Lifetime

Site-to-Source Conversion Factor (quads) (Btu/kwh)

8.3.1.1 Shipments

DOE forecasted shipments for the base case and all standards cases (see chapter 6, 

Shipments Analysis). DOE thinks that the shipment projections under the standards cases could 

be lower than those in the base-case projection because the higher installed costs would cause 

some customers to forego new equipment purchases. However, DOE has no information that 

would allow a calculation of this effect. For the Notice of Proposed Rulemaking (NOPR), the 

projections of total shipments are the same in both the base case and standards cases.

8.3.1.2 National Annual Energy Consumption

The national AEC is the product of the annual UEC and the stocks of units of each 

vintage. This approach accounts for differences in UEC from year to year. DOE initially 

calculated the AEC at the site (i.e., electricity in kilowatt hours [kWh] consumed by the units). 

DOE then calculated primary energy consumption from site energy consumption by applying a 

conversion factor to account for losses associated with the generation, transmission, and 

distribution of electricity.

DOE uses a market- or shipment-weighted average annual UEC in its calculation of the 

national AEC. This takes into account that the equipment markets reflect shipments with a 

distribution of efficiencies as was shown in chapter 2. To assess the impacts on the market from 

the introduction of higher standards, DOE calculates impacts based on efficiency-distribution 

weighted annual UEC. Because DOE only developed energy use for explicit efficiency levels, 
8-5

the distribution of efficiencies used in the calculation is based on the data outlined in chapter 2 to 

describe the current market, but is “compressed” to fit into the range of efficiency levels selected 

for analysis. To do this, each DOE-analyzed efficiency level was examined. The fraction of the 

current market distribution that surrounds a given analyzed efficiency level is allocated to that

efficiency level. 

DOE considers setting standards for each analyzed efficiency level. For each standard 

level analyzed, DOE has assumed that all equipment shipped in the base case with efficiencies 

below the standard level become shipments at that standard level in the standard-level shipment 

distributions. Shipments in the base-case distribution that are above the efficiency defined by the 

standard level are assumed to be unaffected. DOE terms this a “rollup” scenario, because basecase efficiency shipments below the proposed standard level “roll up” to meet the standard.

Table 8.3.2 is an example of how DOE compresses the market distribution into efficiency 

levels by binning as well as the use of the roll-up scenario and resultant market-weighted average 

UECs..

Table 8.3.2 Efficiency Distributions and Market Weighted-Average UECs: Small Water 

Cooled Equipment with Electric Resistance or No Heat

Standard 

Scenario

EER

Market 

Weighted 

Average 

UEC

11.5

(11.5-11.8)

12.1

(11.9-12.5)

13

(12.6-13.4)

14

(13.5-14.4)

15

(14.5-15.6)

16.4

(15.7-16.4) Total

Base Case 7% 27% 13% 13% 20% 20% 100% 8,088

ASHRAE 

Standard 34% 13% 13% 20% 20% 100% 8,065

13 EER 47% 13% 20% 20% 100% 7,912

14 EER 60% 20% 20% 100% 7,705

15 EER 80% 20% 100% 7,473

Max Tech 100% 100% 7,101

The compressed market baseline distribution, used for the NES analyses (and NPV 

analyses in the case of computer room air conditioners), are shown in the Table 8.3.3 through 

Table 8.3.5, followed by the market- or shipment-weighted average annual UECs for each 

product class and analyzed efficiency levels (Table 8.3.6 through Table 8.3.8).
8-6

Table 8.3.3 Water and Evaporatively Cooled Equipment Market Shares by Efficiency 

Level, Base Case Used for NIA Analysis

Equipment Class

Market 

Baseline ASHRAE Level 1 Level 2 Level 3 Level 4

Small WaterCooled E/N 7% 27% 13% 13% 20% 20%

Small WaterCooled O 7% 27% 13% 13% 20% 20%

Large WaterCooled E/N 29% 21% 7% 7% 29% 7%

Large WaterCooled O 29% 21% 7% 7% 29% 7%

Very Large WaterCooled E/N 17% 20% 29% 14% 20% -

Very Large WaterCooled O 14% 23% 29% 14% 20% -

Very Large Evap 

Cooled E/N 65% 27% 6% 2% - -

Very Large Evap 

Cooled O 56% 35% 7% 2% - -

Table 8.3.4 VRF Water Source Heat Pump Market Shares by Efficiency Level, Base Case 

Used for NIA Analysis

Equipment Class

Market 

Baseline ASHRAE Level 1 Level 2 Level 3 Level 4

>135 without Heat 

Recovery - 3% 73% 15% 3% 5%

>135 with Heat 

Recovery - 5% 64% 18% 5% 8%
8-7

Table 8.3.5 Computer Room Air Conditioner Market Shares by Efficiency Level, Base 

Case Used for NIA Analysis

Equipment Class

Market 

Baseline ASHRAE Level 1 Level 2 Level 3 Level 4

Air cooled, 

<65,000 Btu/h 2% 9% 20% 45% 18% 5%

Air cooled, 

≥65,000 to 

<240,000 Btu/h

- 2% 20% 45% 31% 2%

Air cooled, 

≥240,000 Btu/h - 2% 20% 45% 31% 2%

Water cooled, 

<65,000 Btu/h 5% 23% 23% 36% 10% 3%

Water cooled, 

≥65,000 to 

<240,000 Btu/h

2% 26% 30% 22% 16% 4%

Water cooled, 

≥240,000 Btu/h 2% 26% 30% 22% 16% 4%

Water cooled with 

fluid economizers, 

<65,000 Btu/h

5% 23% 23% 36% 10% 3%

Water cooled with 

fluid economizers, 

≥65,000 to 

<240,000 Btu/h

2% 26% 30% 22% 16% 4%

Water cooled with 

fluid economizers, 

≥240,000 Btu/h

2% 26% 30% 22% 16% 4%

Glycol cooled, 

<65,000 Btu/h 5% 23% 23% 36% 10% 3%

Glycol cooled, 

≥65,000 to 

<240,000 Btu/h

2% 26% 30% 22% 16% 4%

Glycol cooled, 

≥240,000 Btu/h 2% 26% 30% 22% 16% 4%

Glycol cooled with 

fluid economizers, 

<65,000 Btu/h

5% 23% 23% 36% 10% 3%

Glycol cooled with 

fluid economizers, 

≥65,000 to 

<240,000 Btu/h

2% 26% 30% 22% 16% 4%

Glycol cooled with 

fluid economizers, 

≥240,000 Btu/h

2% 26% 30% 22% 16% 4%
8-8

Table 8.3.6 Water and Evaporatively Cooled Equipment Market-Weighted Annual 

Average Energy Consumption by Standard Level (kwh/year)

Equipment Class

Market 

Baseline ASHRAE Level 1 Level 2 Level 3 Level 4

Small WaterCooled E/N 8,088 8,065 7,912 7,705 7,473 7,101

Small WaterCooled O 8,126 8,102 7,912 7,705 7,473 7,101

Large WaterCooled E/N 15,776 15,309 15,078 14,602 14,137 13,490

Large WaterCooled O 15,818 15,407 15,078 14,602 14,137 13,490

Very Large WaterCooled E/N 36,893 36,279 35,794 34,518 33,422 -

Very Large WaterCooled O 36,980 36,452 35,794 34,518 33,422 -

Very Large Evap 

Cooled E/N 46,166 44,584 43,265 41,983 - -

Very Large Evap 

Cooled O 46,436 45,033 43,265 41,983 - -

Table 8.3.7 VRF Water Source Heat Pump Market-Weighted Annual Average Energy 

Consumption by Standard Level (kwh/year)

Equipment Class

Market 

Baseline ASHRAE Level 1 Level 2 Level 3 Level 4

>135 without Heat 

Recovery (Cooling) 18,641 18,641 18,598 17,797 17,011 15,872

>135 without Heat 

Recovery (Heating) 7,385 7,385 7,379 7,253 7,117 6,893

>135 with Heat 

Recovery (Cooling) 18,176 18,176 18,094 17,343 16,568 15,421

>135 with Heat 

Recovery (Heating) 4,799 4,799 4,788 4,680 4,558 4,355
8-9

Table 8.3.8 Computer Room Air Conditioner Shipment-Weighted Annual Average Energy 

Consumption by Standard Level (kwh/year)

Equipment Class ASHRAE Level 1 Level 2 Level 3 Level 4

Air cooled, 

<65,000 Btu/h 23,964 23,906 23,666 23,097 21,913

Air cooled, 

≥65,000 to 

<240,000 Btu/h

84,095 84,095 83,897 82,138 77,655

Air cooled, 

≥240,000 Btu/h 197,372 197,372 196,851 192,306 180,909

Water cooled, 

<65,000 Btu/h 22,772 22,674 22,213 21,487 20,407

Water cooled, 

≥65,000 to 

<240,000 Btu/h

84,336 84,188 82,424 79,275 75,491

Water cooled, 

≥240,000 Btu/h 190,411 190,059 185,897 178,506 169,672

Water cooled with 

fluid economizers, 

<65,000 Btu/h

14,419 14,369 14,133 13,761 13,210

Water cooled with 

fluid economizers, 

≥65,000 to 

<240,000 Btu/h

53,455 53,379 52,472 50,858 48,924

Water cooled with 

fluid economizers, 

≥240,000 Btu/h

120,173 119,992 117,848 114,054 109,531

Glycol cooled, 

<65,000 Btu/h 22,669 22,568 22,094 21,352 20,253

Glycol cooled, 

≥65,000 to 

<240,000 Btu/h

92,059 91,865 89,621 85,701 81,081

Glycol cooled, 

≥240,000 Btu/h 204,814 204,371 199,249 190,336 179,864

Glycol cooled with 

fluid economizers, 

<65,000 Btu/h

18,304 18,228 17,876 17,325 16,511

Glycol cooled with 

fluid economizers, 

≥65,000 to 

<240,000 Btu/h

74,255 74,109 72,425 69,495 66,052

Glycol cooled with 

fluid economizers, 

≥240,000 Btu/h

165,135 164,801 160,953 154,283 146,472
8-10

8.3.1.3 Product Lifetime

The source for water and evaporatively cooled products was the advanced notice of 

proposed rulemaking on Energy Conservation Standards for Commercial Unitary Air 

Conditioners and Heat Pumps published in the Federal Register

For VRF water source heat pumps, DOE used a product lifetime of 19 years based on the 

ASHRAE 2011 HVAC Applications Handbook.

on July 29, 2004. 69 FR 45460. 

The product lifetime from the prior TSD was estimated to be a mean of 15.4 years. More recent 

sources confirm this estimate including the 2008 California Database for Energy Efficient 

Resources (15 years). For this preliminary analysis, DOE used a single-value lifetime of 15 

years. 

c

8.3.2 Site-to-Source Energy Conversion Factors 

For computer room air conditioners, DOE used 

a product lifetime of 15 years, based on information discussed in chapter 6.

For all products the Department calculated energy savings as site energy, which it then 

converted to source energy— the energy that electric power plants consume. The Department 

used site-to-source energy conversion factors from the AEO 2010 (water and evaporatively 

cooled products – not updated from the NODA) or AEO 2011 (computer room air conditioners 

and VRF water source heat pumps). The Department extrapolated the values in later years (after 

2035) from their relative sources because the AEO does not forecast beyond 2035. To arrive at 

values for these later years, the Department used the forecast’s trend from 2025 to 2035 to 

establish conversion factors in the years 2036 to 2043. 

8.3.3 Compliance Dates and Analysis Period

If DOE were to propose a rule prescribing energy conservation standards at the efficiency 

levels contained in ASHRAE Standard 90.1 2010, EPCA states that compliance with amended 

standards is required on or after a date which is two or three years (depending on equipment size) 

after the effective date of the applicable minimum energy efficiency requirement in the amended 

ASHRAE standard (i.e., ASHRAE Standard 90.1 2010). (42 U.S.C. 6313(a)(6)(D)) 

For all water and evaporatively cooled equipment in this rulemaking, the effective date in 

ASHRAE Standard 90.1 2010 is June 1, 2011. Thus, if DOE decides to adopt the levels in 

ASHRAE Standard 90.1 2010, the rule would apply to small equipment (two product classes) 

manufactured on or after June 1, 2013, which is two years from the effective date specified in 

ASHRAE Standard 90.1 2010, and to large and very large equipment (six product classes) 

 c ASHRAE’s handbook does not list a service life for VRF equipment specifically, but it does provide service life 

estimates for water-source heat pumps generally. In this regard, ASHRAE cites two different studies for equipment 

service life. The first study of this type of equipment reported a service life of 19 years. The second, more-recent 

study cited suggests a service life of 24 years for all classes of direct expansion cooling systems. This second study 

relies heavily on extrapolation of a survival curve based on a sample of 1907 DX equipment observations from 

various equipment classes from which 284 units had actually been replaced and most were still in service. 

(ASHRAE Research Project 1237-TRP Interactive Web-based Owning and Operating Cost Database Final Report, 

July 2005. Available at www.ashrae.org ) However, as VRF products are new to the U.S. with relatively little data 

on lifetime, DOE has relied on the older, more conservative, 19-year service life estimate for its analysis.
8-11

manufactured on or after June 1, 2014, which is three years from the effective date specified in 

ASHRAE Standard 90.1 2010. 

For VRF water source heat pumps in this rulemaking, ASHRAE Standard 90.1–2010 

does not specify an effective date; therefore the effective date is assumed to be the publication 

date of ASHRAE Standard 90.1-2010, or October 29, 2010. Thus, if DOE decides to adopt the 

levels in ASHRAE Standard 90.1–2010, the rule would apply to large and very large equipment 

(the product class analyzed here) manufactured on or after October 29, 2013, which is three 

years from the effective date specified in ASHRAE Standard 90.1–2010. 

For computer room air conditioners, the rule would apply to equipment <65,000 Btu/h 

(10 product classes combined into five for analysis purposes) manufactured on or after October 

29, 2012, which is two years after the publication date of ASHRAE Standard 90.1-2010, and to 

equipment ≥65,000 Btu/h (20 product classes combined into 10 for analysis purposes) 

manufactured on or after October 29, 2013, which is three years after the publication date of 

ASHRAE Standard 90.1-2010. Typically equipment at or above 65,000 Btu/h and less than 

135,000 Btu/h would have a compliance date two years after the publication of ASHRAE 

Standard 90.1. However, because ASHRAE Standard 90.1-2010 established a product class for 

computer room air conditioners that combines traditional small and large categories, DOE has 

decided to assign the later compliance date of three years after the publication of ASHRAE 90.1-

2010 to all computer room air conditioner product classes that cover products between 65,000 

Btu/h and 240,000 Btu/h.

If DOE were to propose a rule prescribing energy conservation standards higher than the 

efficiency levels contained in ASHRAE Standard 90.1 2010, EPCA states that any such 

standards “shall become effective for products manufactured on or after a date which is four 

years after the date such rule is published in the Federal Register.” (42 U.S.C. 6313(a)(6)(D)) 

Thus, for products which DOE might adopt a level more stringent than the ASHRAE efficiency 

levels, the rule would apply to products manufactured on or after April 29, 2017, which is four 

years from the date of publication of the final rule that DOE must meet for higher than ASHRAE 

efficiency levels (30 months after publication of ASHRAE, which was October 29, 2010).

A 30-year analysis period is used for the NES, extending from the compliance date based 

on adoption of the levels in ASHRAE Standard 90.1-2010. For small computer room air 

conditioners, the analysis period extends from 2012 to 2041; for large computer room air 

conditioners, small water and evaporatively cooled equipment, and VRF water source heat 

pumps, the analysis period extends from 2013 to 2042; for large water and evaporatively cooled 

equipment the analysis period extends from 2014 to 2043. The time period for energy savings for 

standards going higher than ASHRAE Standard 90.1-2010 is from 2017 to 2041, 2042, or 2043, 

based on the product classes described. This approach accounts for any lost energy savings from 

a delay incurred by DOE’s not adopting ASHRAE efficiency levels, but instead adopting 

standards at efficiency levels higher than those specified in ASHRAE Standard 90.1-2010.
8-12

8.4 NET PRESENT VALUE (Computer Room Air Conditioners)

8.4.1 Net Present Value Definition

The NPV is the value in the present of a time series of costs and savings. The NPV is 

given by the following equation: 

NPV = PVS – PVC

Where: PVS = present value of operating cost savings (including electricity, repair, and 

maintenance costs) ($), 

PVC = present value of increased total installed costs (including equipment and 

installation) ($). 

The PVS and PVC are determined according to the following expressions: 

PVS = � OCSt ∗ DFt

t

PVC = � TICt ∗ DFt

t

where: OCS = total annual operating cost savings ($), 

TIC = total annual installed cost increases ($), 

DF = discount factor, 

t = year (PVS is summed over 2012 to 2055 or 2013 to 2056, and PVC is summed over 

2012 to 2041 or 2013 to 2042). 

DOE determined the contribution to PVC for each year, from the effective date of the 

standard (2012 or 2013) to the year 2041 or 2042, discounted for the NOPR analysis to the year 

2012. The contribution to PVS was determined for each year, from the effective date of the 

standard (2012 or 2013) to the year when the last units purchased in 2041 or 2042 have retired 

(assumed to be 2055 or 2056). DOE first calculated costs and savings as the difference between a 

standards case and a base case represented as adoption of the ASHRAE Standard. DOE 

calculated a discount factor from the discount rate and the number of years between the 

“present” (i.e., year to which the sum is being discounted) and the year in which the costs and 

savings occur. DOE calculated the NPV as the sum over time of the discounted net savings. 

8.4.2 Net Present Value Inputs 

Table 8.4.1 lists the inputs to the NPV calculation. Each of the inputs is then discussed 

below. 
8-13

Table 8.4.1 Net Present Value Inputs

Input

Total Annual Installed Cost (TICt) ($)

Total Annual Operating Cost Savings (OCSt) ($)

Discount Factor

Present Value of Costs (PVC) ($)

Present Value of Savings (PVS) ($)

8.4.2.1 Total Annual Installed Cost 

The increase in the total annual installed cost is equal to the annual change in the per-unit 

total installed cost (difference between base case and standards case) multiplied by the shipments 

forecasted in the standards case. The total installed cost includes both the equipment cost and the 

installation price. DOE based average equipment costs on average manufacturer prices (see 

chapter 6, LifeCycle Cost and Payback Period Analysis) multiplied by average overall markup 

values shown in chapter 5). DOE based average installation prices on nationally representative 

values for each equipment class and efficiency level (see chapter 6), and developed base-case 

and standards-case energy-efficiency shipment scenarios as discussed in chapter 7. For both the 

base-case and standards-case energy-efficiency scenarios, DOE calculated annual shipmentweighted-average efficiencies. Associated with each annual shipment-weighted-average 

efficiency, DOE assigned a total installed cost, based on shipment-weighted total installed cost 

for all efficiency levels shipped under that standards-case scenario. 

DOE determined the relationship between efficiency level and total installed cost for each 

computer room air conditioner class as shown in Table 8.4.2. DOE considers the ASHRAE level 

as the base minimum standard that it could set under Federal law. In the NIA, DOE establishes 

the NPV for going above the ASHRAE base case, but does not need to determine the NPV of 

adoption of that minimum base case. DOE only looked at subsequent higher standard levels to 

determine whether each higher level, when examined independently, has a positive NPV 

compared with the ASHRAE base case. 
8-14

Table 8.4.2 Total Installed Cost per Unit by Efficiency Level from Life-Cycle Cost (2011$)

Equipment Class ASHRAE Level 1 Level 2 Level 3 Level 4

Air cooled, <65,000 

Btu/h $ 11,982 $ 13,471 $ 15,222 $ 17,281 $ 19,700

Air cooled, ≥65,000 

to <240,000 Btu/h $ 39,412 $ 41,651 $ 44,063 $ 46,664 $ 49,467

Air cooled, 

≥240,000 Btu/h $ 56,879 $ 60,102 $ 63,577 $ 67,322 $ 71,358

Water cooled, 

<65,000 Btu/h $ 23,748 $ 20,311 $ 17,527 $ 15,273 $ 13,447

Water cooled, 

≥65,000 to <240,000 

Btu/h $ 22,983 $ 28,614 $ 36,183 $ 46,355 $ 60,027

Water cooled, 

≥240,000 Btu/h $ 42,217 $ 52,902 $ 67,262 $ 86,562 $ 112,498

Water cooled with 

fluid economizers, 

<65,000 Btu/h $ 25,059 $ 21,422 $ 18,476 $ 16,090 $ 14,158

Water cooled with 

fluid economizers, 

≥65,000 to <240,000 

Btu/h $ 24,169 $ 30,129 $ 38,138 $ 48,903 $ 63,372

Water cooled with 

fluid economizers, 

≥240,000 Btu/h $ 44,469 $ 55,777 $ 70,973 $ 91,397 $ 118,844

Glycol cooled, 

<65,000 Btu/h $ 24,353 $ 20,916 $ 18,132 $ 15,878 $ 14,052

Glycol cooled, 

≥65,000 to <240,000 

Btu/h $ 24,377 $ 30,001 $ 37,559 $ 47,717 $ 61,368

Glycol cooled, 

≥240,000 Btu/h $ 42,217 $ 52,902 $ 67,262 $ 86,562 $ 112,498

Glycol cooled with 

fluid economizers, 

<65,000 Btu/h $ 25,664 $ 22,027 $ 19,081 $ 16,695 $ 14,763

Glycol cooled with 

fluid economizers, 

≥65,000 to <240,000 

Btu/h $ 25,563 $ 31,514 $ 39,512 $ 50,261 $ 64,708

Glycol cooled with 

fluid economizers, 

≥240,000 Btu/h $ 44,469 $ 55,777 $ 70,973 $ 91,397 $ 118,844
8-15

8.4.2.2 Annual Installed Cost–Weighted by Efficiency Distribution 

Using the base-case market distribution and the calculated distributions at each possible 

standard level, discussed in the NES section, DOE developed an average shipment-weighted 

total installed cost for all shipments for each proposed standard level. The shipment-weighted 

total installed costs for each possible standard level are listed in Table 8.4.3. 

Table 8.4.3 Shipment-Weighted Average Total Installed Cost by Standard Level (2011$)

Equipment Class ASHRAE Level 1 Level 2 Level 3 Level 4

Air cooled, <65,000 

Btu/h $ 15,074 $ 15,243 $ 15,800 $ 17,390 $ 19,700

Air cooled, ≥65,000 to 

<240,000 Btu/h $ 44,421 $ 44,465 $ 44,985 $ 46,719 $ 49,467

Air cooled, ≥240,000 

Btu/h $ 64,091 $ 64,155 $ 64,904 $ 67,401 $ 71,358

Water cooled, <65,000 

Btu/h $ 19,588 $ 18,619 $ 17,191 $ 15,226 $ 13,447

Water cooled, ≥65,000 to 

<240,000 Btu/h $ 32,797 $ 34,374 $ 38,764 $ 46,902 $ 60,027

Water cooled, ≥240,000 

Btu/h $ 60,839 $ 63,831 $ 72,160 $ 87,599 $ 112,498

Water cooled with fluid 

economizers, <65,000 

Btu/h $ 20,657 $ 19,631 $ 18,121 $ 16,041 $ 14,158

Water cooled with fluid 

economizers, ≥65,000 to 

<240,000 Btu/h $ 34,556 $ 36,224 $ 40,870 $ 49,482 $ 63,372

Water cooled with fluid 

economizers, ≥240,000 

Btu/h $ 64,176 $ 67,342 $ 76,156 $ 92,495 $ 118,844

Glycol cooled, <65,000 

Btu/h $ 20,193 $ 19,224 $ 17,797 $ 15,831 $ 14,052

Glycol cooled, ≥65,000 to 

<240,000 Btu/h $ 34,178 $ 35,753 $ 40,137 $ 48,263 $ 61,368

Glycol cooled, ≥240,000 

Btu/h $ 60,839 $ 63,831 $ 72,160 $ 87,599 $ 112,498

Glycol cooled with fluid 

economizers, <65,000 

Btu/h $ 21,262 $ 20,236 $ 18,726 $ 16,646 $ 14,763

Glycol cooled with fluid 

economizers, ≥65,000 to 

<240,000 Btu/h $ 35,935 $ 37,601 $ 42,240 $ 50,839 $ 64,708

Glycol cooled with fluid 

economizers, ≥240,000 

Btu/h $ 64,176 $ 67,342 $ 76,156 $ 92,495 $ 118,844
8-16

8.4.2.1 Price Forecast

As discussed in chapter 6, DOE used a constant price assumption for the default forecast 

in the NIA. In order to investigate the impact of different product price forecasts on the 

consumer net present value (NPV) for the considered efficiency levels for computer room air 

conditioners, DOE also considered two alternative price trends. One of these used an exponential 

fit on the deflated price index for all other miscellaneous refrigeration and air-conditioning 

equipments, and the other is based on the “deflator— other durables excluding medical” that was 

forecasted for AEO2011. Details on how these alternative price trends were developed are in 

Appendix 10-B, which also presents the results of the sensitivity analysis.

8.4.2.2 Total Annual Operating Cost Savings 

The annual operating cost savings to the nation are equal to the change in the average 

annual operating costs (difference between base case and standards case) per unit in the stock for 

each year multiplied by the total number of units in the stock forecasted in the standards case. 

Calculations are done separately for each equipment class. 

The annual operating cost includes electricity, repair, and maintenance costs. 

Annual Energy Cost Savings. DOE calculated annual energy costs based on national 

commercial electricity prices shown in AEO 2011. To calculate annual energy cost savings for a 

particular equipment class in a given year, DOE first calculated the annual energy costs in each 

forecast year at each efficiency level by multiplying the U.S. average energy consumption at 

each efficiency level by the stock at each efficiency level and in each equipment class, as 

appropriate, in each year. This is then multiplied by the national average commercial fuel prices. 

To determine energy savings, the national energy costs at each efficiency level (Levels 1–4) 

were then subtracted from the national energy costs at the ASHRAE level. Commercial fuel 

prices for electricity are derived from the reference case AEO 2011 forecasts through 2035. DOE 

extrapolated the trend in values from 2025 to 2035 of the forecast to establish fuel prices from 

2035 to 2056, through the end of the NPV analysis period. This method of extrapolation is in line 

with methods the EIA uses to forecast fuel prices for the Federal Energy Management Program. 

Annual Repair Costs. DOE based average annual repair costs on a base repair cost, 

which increased with the value of the computer room air conditioner equipment in 2011$ (see 

chapter 5). Using the efficiency distribution of the stock at each standard level analyzed, DOE 

developed a weighted average repair cost for the stock based on the distribution at each 

standard level. 

Annual Maintenance Costs. DOE determined average annual maintenance costs for 

computer room air conditioners from the life-cycle cost analysis (see chapter 6). DOE used a 

value of $84 per year for computer room air conditioners less than 240,000 Btu/h and $102 per 

year for computer room air conditioners greater than 240,000 Btu/h. These values were applied 

to all computer room air conditoiners in the stock at each year. 
8-17

8.4.2.3 Discount Factor 

DOE multiplied monetary values in future years by the discount factor to determine the 

present value. The discount factor (DF) is described by the following equation: 

DF = 1

(1 + r)t−tp

where r = discount rate (percent), 

t = year of the monetary value, 

tp = year in which the present value is being determined. 

DOE estimated national impacts with both a 3 percent and a 7 percent real discount 

rate. These discount rates are used in accordance with the Office of Management and Budget’s 

(OMB) guidance to Federal agencies on the development of regulatory analysis (OMB Circular 

A4, September 17, 2003), and section E, “Identifying and Measuring Benefits and Costs,” 

therein. DOE defined the present year as 2012 for the NOPR analysis. 

8.4.2.4 Present Value of Costs 

The present value of increased installed costs is the annual installed cost increase in each 

year (i.e., the difference between the standards case and the base case), discounted to the present, 

and summed for the time period that DOE is considering for the installation of computer room 

air conditioners (i.e., from the earliest effective date of standards, 2012 or 2013, to the year 2041 

or 2042). 

The increase in total installed cost refers to the equipment cost and installation cost 

associated with the higher-efficiency computer room air conditioners purchased in the 

standards case compared to the base case. DOE calculated annual installed costs as the 

difference in total installed cost for new equipment purchased each year, multiplied by the 

shipments in the standards case. 

8.4.2.5 Present Value of Savings 

The present value of operating cost savings is the annual operating cost savings (i.e., the 

difference between the base case and standards case) discounted to the year 2012, and summed 

over the period from the effective date of the standard, 2012 or 2013, to the time when the last 

unit installed in 2041 or 2042 is retired from service (assumed to be 2055 or 2056). Operating 

cost savings represent decreases in operating costs (including electricity, repair, and 

maintenance) associated with the higher efficiency of computer room air conditioners purchased 

in the standards case compared to the base case. Total annual operating cost savings is the 

savings multiplied by the number of computer room air conditioners of each vintage surviving in 

a particular year. Equipment consumes energy over its entire lifetime, and for units purchased in 

2041 or 2042, the PVS includes energy consumed until the last unit is retired from service at the 

end of 2055 or 2056.
8-18

8.5 NES AND NPV RESULTS

The NES spreadsheet model provides estimates of the NES and NPV for various 

efficiency levels. The inputs to the NES spreadsheet are discussed earlier in sections 7.2.2 

(National Energy Savings Inputs) and 7.3.2 (Net Present Value Inputs).

8.5.1 National Energy Savings and Net Present Value Input Summary 

Table 8.5.1 summarizes the inputs to the NES spreadsheet model. For each input, a brief 

description of the data source is given.

Table 8.5.1 Inputs to the NES Spreadsheet Model

Input Data Description

Effective Date of Standard 2012 or 2013 depending on product class.

Shipments Annual shipments from shipments model (see chapter 7, Shipments 

Analysis).

Base-Case Effiicencies Distribution of base-case shipments by efficiency level.

Standards-Case Efficiencies Distribution of shipments by efficiency level for each standards 

case. Standards-case annual market shares by efficiency level 

remain constant over time for the base case and each standards case.

Annual Energy Consumption Annual weighted-average values are a function of efficiency level. 

(Established from the Energy Use Characterization, chapter 4).

Site-to-Source Conversion Site-to-source conversion determined from EIA’s AEO2011 for 

electricity and varies over the analysis period.

Below inputs are for computer room air conditioners only

Total Installed Cost Annual weighted-average values are a function of efficiency level 

(see chapter 6, LifeCycle Cost and Payback Period Analysis).

Repair Cost Annualized repair cost for baseline efficiency computer room air 

conditioners based on cost data from RS Means CostWorks 2011. 

DOE assumed that the materials portion of the repair costs would 

vary in direct proportion with the MSP at higher efficiency levels 

(see chapter 6).

Maintenance Cost Annual maintenance costs were $84 for small computer room air 

conditioners and $102 for large computer room air conditioners 

based on data on annual maintenance costs for computer room air 

conditioners based on RS Means CostWorks 2011 (see chapter 

6). Annual maintenance cost did not vary as a function of 

efficiency.

Escalation of Electricity Prices 2011 EIA Annual Energy Outlook forecasts (to 2035) with 

extrapolation for beyond 2035.

Discount Rate 3 and 7 percent real.

Present Year Future costs are discounted to year 2012.

8.5.2 National Energy Savings Results

The following section provides NES results for each efficiency level considered for the 

equipment analyzed. The results are cumulative to 2041, 2042, or 2043, depending on product 
8-19

class and are shown as primary energy savings in quads. Inputs to the NES spreadsheet model 

are based on weighted-average values, yielding results that are discrete point values, rather than a 

distribution of values as in the lifecycle cost (LCC) analysis. 

Water and Evaporatively Cooled Products

Table 8.5.2 and Table 8.5.3 summarize the NES due to new energy conservation 

standards for the eight product classes of water and evaporatively cooled equipment examined. 

Results of the national energy savings analysis are provided for the two shipment case scenarios, 

Historical Trends and Fixed to 2009. Recall that all levels higher than ASHRAE are shown as 

net of ASHRAE savings.

Table 8.5.2 National Energy Savings for Water and Evaporatively Cooled Products 

(Quads, 2013–2042 or 2014-2043): Based on Historical Trends

Efficiency 

Level

Small 

Water

E/N

65-135

Small 

Water

O

65-135

Large 

Water

E/N

135-240

Large 

Water

O

135-240

VL 

Water

E/N

240-760

VL Water

O

240-760

VL Evap

E/N

240-760

VL Evap

O

240-760

ASHRAE 

Standard 0.000005 0.0000005 0.0001 0.00001 0.0002 0.002 0.0001 0.001

13/12.5 EER 0.00002 0.000002 0.00002 0.00001 0.0001 0.001 0.00008 0.001

14 EER 0.00004 0.000005 0.00013 0.00002 0.0005 0.005 - -

15 EER 0.00007 0.000009 0.00024 0.00003 - - - -

Max Tech 0.00012 0.000014 0.00039 0.00005 0.0008 0.008 0.00017 0.002

Table 8.5.3 National Energy Savings for Water and Evaporatively Cooled Products 

(Quads, 2013–2042 or 2014-2043): Shipments Fixed to 2009

Efficiency 

Level

Small 

Water

E/N

65-135

Small 

Water

O

65-135

Large 

Water

E/N

135-240

Large 

Water

O

135-240

VL 

Water

E/N

240-

760

VL Water

O

240-760

VL Evap

E/N

240-760

VL Evap

O

240-760

ASHRAE 

Standard 0.000011 0.0000013 0.0003 0.00003 0.0001 0.001 0.0001 0.001

13/12.5 EER 0.00006 0.000008 0.00008 0.00001 0.0001 0.001 0.00005 0.001

14 EER 0.00014 0.000017 0.00032 0.00004 0.0003 0.003 - -

15 EER 0.00024 0.000028 0.00056 0.00007 - - - -

Max Tech 0.00039 0.000044 0.00089 0.00010 0.0005 0.005 0.00011 0.001

VRF Water Source Heat Pumps

Table 8.5.4 summarizes the NES due to new energy conservation standards for the two 

VRF water source heat pump product classes examined. Recall that all levels higher than 

ASHRAE are shown as net of ASHRAE savings.
8-20

Table 8.5.4 National Energy Savings for VRF Water Source Heat Pumps >135,000 Btu/h 

(Quads, 2013-2042)

Efficiency Level Without Heat 

Recovery With Heat Recovery

Level 1 – ASHRAE – 10.0/9.8 EER - -

Level 2 – 11 EER 0.0009 0.0008

Level 3 – 12 EER 0.0174 0.0083

Level 4 – 13 EER 0.0416 0.0195

Level 5 – “Max-Tech” – 14.5 EER 0.0761 0.0358

* The potential energy savings for efficiency levels more stringent than those specified by ASHRAE 

Standard 90.1-2010 were calculated relative to the efficiency levels that would result if ASHRAE Standard 

90.1-2010 standards were adopted.

Computer Room Air Conditioners

Table 8.5.5 summarizes the NES due to new energy conservation standards for the 15 

computer room air conditioner product classes examined. Recall that all levels higher than 

ASHRAE are based on ASHRAE as the baseline.
8-21

Table 8.5.5 National Energy Savings for Computer Room Air Conditioners (Quads, 2012-

2041 or 2013-2042)

Equipment Class ASHRAE 

Level

Efficiency

Level 1

Efficiency 

Level 2

Efficiency 

Level 3

Efficiency 

Level 4

Air conditioners, air cooled, 

<65,000 Btu/h 0.00018 0.0006 0.0021 0.0052 0.0086

Air conditioners, air cooled, 

≥65,000 to <240,000 Btu/h - 0.006 0.059 0.196 0.364

Air conditioners, air cooled, 

≥240,000 Btu/h - 0.004 0.034 0.112 0.206

Air conditioners, water 

cooled, <65,000 Btu/h 0.00003 0.0001 0.0003 0.0007 0.0010

Air conditioners, water 

cooled, ≥65,000 to <240,000 

Btu/h 0.0009 0.0088 0.0246 0.0435 0.0634

Air conditioners, water 

cooled, ≥240,000 Btu/h 0.0008 0.0079 0.0220 0.0388 0.0565

Air conditioners, water 

cooled with fluid 

economizers, <65,000 Btu/h 0.00001 0.00004 0.00011 0.00021 0.00031

Air conditioners, water 

cooled with fluid 

economizers, ≥65,000 to 

<240,000 Btu/h 0.0004 0.0038 0.0106 0.0187 0.0273

Air conditioners, water 

cooled with fluid 

economizers, ≥240,000 Btu/h 0.0002 0.0016 0.0043 0.0076 0.0111

Air conditioners, glycol 

cooled, <65,000 Btu/h 0.00003 0.00013 0.00033 0.00063 0.00092

Air conditioners, glycol 

cooled, ≥65,000 to <240,000 

Btu/h 0.001 0.011 0.031 0.054 0.078

Air conditioners, glycol 

cooled, ≥240,000 Btu/h 0.0008 0.0080 0.0220 0.0384 0.0554

Air conditioners, glycol 

cooled with fluid 

economizers, <65,000 Btu/h 0.00002 0.0001 0.0002 0.0005 0.0007

Air conditioners, glycol 

cooled with fluid 

economizers, ≥65,000 to 

<240,000 Btu/h 0.001 0.010 0.027 0.047 0.067

Air conditioners, glycol 

cooled with fluid 

economizers, ≥240,000 Btu/h 0.0005 0.0054 0.0147 0.0257 0.0369

* All energy savings from efficiency levels above ASHRAE are calculated with ASHRAE levels 

as a baseline.
8-22

8.5.3 Annual Costs and Savings

As a prelude to providing the NPVs for each efficiency level in each equipment class, this 

section presents the annual equipment cost (or total installed cost) increases and annual operating 

cost savings at the national level. 

Figure 8.5.1 shows the changes over time of the non-discounted annual equipment price 

increases and the non-discounted operating cost savings for efficiency level 1 for the small aircooled equipment class, as an example. The total net annual impact is the discounted value of the 

difference between annual equipment purchases and annual operating costs at a 7-percent 

discount rate. The annual equipment price change is the increase in equipment price for 

equipment purchased each year over the 30-year period from 2012 or 2013 to 2041 or 2042. The 

annual operating savings is the savings in operating costs for equipment purchased, and which 

have not been retired, for each year over the time period from 2012 or 2013 to 2055 or 2056. The 

NPV (the discounted total net annual impact) is the difference between the cumulative annual 

discounted savings and the cumulative annual discounted costs.

Figure 8.5.1 National Annual Costs and Savings for Efficiency Level 1 (Small Air-Cooled 

Computer Room Air Conditioners)

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

$0.000

2012 2017 2022 2027 2032 2037 2042 2047 2052

Billion 2011$

Net Savings

Undiscounted Total Annual Operating Savings

Annual Total Incremental Equip. Cost

Discounted Total Net Annual Impact
8-23

Figure 8.5.1 shows smaller annual operating cost savings compared to the increased 

equipment price costs through 2024, after which annual operating cost savings begin to eclipse 

increased equipment price costs. After 2041, no additional computer room air conditioner sales 

are included in the analysis; however the annual energy savings continues to accrue until the last 

of the computer room air conditioners installed in 2041 are removed from the stock after 2055.

8.5.4 Net Present Value Results

DOE developed NPV results for the efficiency levels considered for 15 computer room 

air conditioner equipment classes. Results are cumulative and are shown as the discounted value 

of these savings in dollar terms. The inputs to the NES spreadsheet model are based on 

weighted-average values yielding results that are discrete point values, rather than a distribution 

of values as in the LCC analysis. The present value of increased total installed costs is the total 

installed cost increase (i.e., the difference between the standards case and base case), discounted 

to 2012, and summed over the time period in which DOE evaluates the impact of standards (i.e., 

from the effective date of the standards, 2012 or 2013, to the year 2041 or 2042). 

Savings are decreases in operating costs (including fuel costs, repair, and maintenance) 

associated with the higher energy efficiency of computer room air conditioners purchased in the 

standards case compared to the base case. Total operating cost savings are the average savings 

per unit multiplied by the number of units of each vintage (i.e., the year of manufacture) 

surviving in a particular year. Computer room air conditioner equipment consumes energy and 

must be maintained over its entire lifetime. For units purchased in 2041 or 2042, the operating 

cost includes energy consumed and maintenance and repair costs incurred until the last unit is 

retired from service in 2055 or 2056. 

As an example, Figure 8.5.2 shows the NPV and NES results for the four efficiency 

levels analyzed for the small air-cooled equipment class, with NPVs calculated using a sevenpercent discount rate. Both NES and NPV are calculated as benefits of the analyzed standard 

levels compared with adoption of the ASHRAE 90.1-2010 standard level. 
8-24

Figure 8.5.2 Cumulative NES and NPV Results for Small Air-Cooled Computer Room Air 

Conditioners Based on a Seven-Percent Discount Rate

Table 8.5.6 shows the NPV results for the efficiency levels considered for computer room 

air conditioner equipment based on a 7-percent discount rate. DOE based all results on electricity 

price forecasts from the AEO2011 Reference Case. Table 8.5.7 provides the NPV results based 

on the 3-percent discount rate and electricity price forecasts from the AEO 2011 Reference Case. 

$(0.020)

$(0.018)

$(0.016)

$(0.014)

$(0.012)

$(0.010)

$(0.008)

$(0.006)

$(0.004)

$(0.002)

$-

$0.002 

0.0000

0.0010

0.0020

0.0030

0.0040

0.0050

0.0060

0.0070

0.0080

0.0090

0.0100

Level 1 Level 2 Level 3 Max Tech

NPV (Billioin 2011$)

Cumulative Energy Savings (Quads)

Efficiency Level

Air-Cooled <65 kBtu/h

Energy Savings NPV
8-25

Table 8.5.6. Summary of Cumulative Net Present Value for Computer Room Air 

Conditioners (Seven Percent Discount Rate) 

Equipment Class

Net Present Value (Billion 2011$)

Efficiency 

Level 1

Efficiency 

Level 2

Efficiency 

Level 3

Efficiency 

Level 4

Air conditioners, air cooled, 

<65,000 Btu/h $ 0.0003 $ (0.0005) $ (0.0060) $ (0.0174)

Air conditioners, air cooled, 

≥65,000 to <240,000 Btu/h $ 0.01 $ 0.10 $ 0.29 $ 0.44 

Air conditioners, air cooled, 

≥240,000 Btu/h $ 0.01 $ 0.07 $ 0.22 $ 0.37 

Air conditioners, water cooled, 

<65,000 Btu/h $ 0.001 $ 0.003 $ 0.006 $ 0.009 

Air conditioners, water cooled, 

≥65,000 to <240,000 Btu/h $ (0.008) $ (0.053) $ (0.166) $ (0.377)

Air conditioners, water cooled, 

≥240,000 Btu/h $ (0.001) $ (0.026) $ (0.097) $ (0.239)

Air conditioners, water cooled 

with fluid economizers, <65,000 

Btu/h $ 0.001 $ 0.002 $ 0.003 $ 0.005 

Air conditioners, water cooled 

with fluid economizers, ≥65,000 

to <240,000 Btu/h $ (0.02) $ (0.08) $ (0.20) $ (0.41)

Air conditioners, water cooled 

with fluid economizers, ≥240,000 

Btu/h $ (0.005) $ (0.023) $ (0.061) $ (0.127)

Air conditioners, glycol cooled, 

<65,000 Btu/h $ 0.001 $ 0.003 $ 0.006 $ 0.008 

Air conditioners, glycol cooled, 

≥65,000 to <240,000 Btu/h $ (0.003) $ (0.044) $ (0.157) $ (0.375)

Air conditioners, glycol cooled, 

≥240,000 Btu/h $ 0.002 $ (0.017) $ (0.077) $ (0.200)

Air conditioners, glycol cooled 

with fluid economizers, <65,000 

Btu/h $ 0.001 $ 0.003 $ 0.005 $ 0.008 

Air conditioners, glycol cooled 

with fluid economizers, ≥65,000 

to <240,000 Btu/h $ (0.01) $ (0.08) $ (0.24) $ (0.53)

Air conditioners, glycol cooled 

with fluid economizers, ≥240,000

Btu/h $ (0.004) $ (0.031) $ (0.10) $ (0.23)

* Numbers in parentheses indicate negative NPV.
8-26

Table 8.5.7. Summary of Cumulative Net Present Value for Computer Room Air 

Conditioners (Three Percent Discount Rate) 

Equipment Class

Net Present Value (Billion 2011$)

Efficiency 

Level 1

Efficiency 

Level 2

Efficiency 

Level 3

Efficiency 

Level 4

Air conditioners, air cooled, 

<65,000 Btu/h $ 0.001 $ 0.002 $ (0.004) $ (0.021)

Air conditioners, air cooled, 

≥65,000 to <240,000 Btu/h $ 0.03 $ 0.26 $ 0.76 $ 1.25 

Air conditioners, air cooled, 

≥240,000 Btu/h $ 0.02 $ 0.18 $ 0.54 $ 0.93 

Air conditioners, water cooled, 

<65,000 Btu/h $ 0.003 $ 0.006 $ 0.012 $ 0.017 

Air conditioners, water cooled, 

≥65,000 to <240,000 Btu/h $ (0.006) $ (0.079) $ (0.280) $ (0.671)

Air conditioners, water cooled, 

≥240,000 Btu/h $ 0.006 $ (0.028) $ (0.150) $ (0.407)

Air conditioners, water cooled 

with fluid economizers, <65,000 

Btu/h $ 0.001 $ 0.003 $ 0.006 $ 0.009 

Air conditioners, water cooled 

with fluid economizers, ≥65,000 

to <240,000 Btu/h $ (0.03) $ (0.14) $ (0.37) $ (0.77)

Air conditioners, water cooled 

with fluid economizers, ≥240,000 

Btu/h $ (0.008) $ (0.039) $ (0.110) $ (0.235)

Air conditioners, glycol cooled, 

<65,000 Btu/h $ 0.002 $ 0.006 $ 0.011 $ 0.016 

Air conditioners, glycol cooled, 

≥65,000 to <240,000 Btu/h $ 0.004 $ (0.058) $ (0.258) $ (0.665)

Air conditioners, glycol cooled, 

≥240,000 Btu/h $ 0.01 $ (0.01) $ (0.12) $ (0.34)

Air conditioners, glycol cooled 

with fluid economizers, <65,000 

Btu/h $ 0.002 $ 0.006 $ 0.011 $ 0.015 

Air conditioners, glycol cooled 

with fluid economizers, ≥65,000 

to <240,000 Btu/h $ (0.02) $ (0.14) $ (0.43) $ (0.97)

Air conditioners, glycol cooled 

with fluid economizers, ≥240,000 

Btu/h $ (0.003) $ (0.047) $ (0.17) $ (0.41)

* Numbers in parentheses indicate negative NPV.
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REFERENCES

1 U.S. Department of Energy, Technical Support Document: Energy Efficiency Program 

for Commercial and Industrial Equipment: Efficiency Standards for Commercial 

Heating, Air-Conditioning, and Water Heating Equipment Including Packaged Terminal 

Air-Conditioners and Packaged Terminal Heat Pumps, Small Commercial Packaged 

Boiler, Three-Phase Air-Conditioners and Heat Pumps <65,000 Btu/h, and SinglePackage Vertical Air Conditioners and Single-Package Vertical Heat Pumps < 65,000 

Btu/h, March 2006. Washington, DC.

2 California Public Utility Commission 2008. Database for Energy Efficient Resources. 

(Last accessed April 20, 2011.) <www.deeresources.com>

3 2011 ASHRAE Handbook HVAC Applications. ASHRAE, 2011. Atlanta GA (Available 

at www.ashrae.org).

4 U.S. Department of Energy/Energy Information Administration. 2010. Annual Energy 

Outlook 2010. DOE/EIA0383(2010), DOE/EIA, Washington, D.C.

5 U.S. Department of Energy/Energy Information Administration. 2011. Annual Energy 

Outlook 2011. DOE/EIA0383(2011), DOE/EIA, Washington, D.C.

ABBREVIATIONS AND ACRONYMS 

AEC annual energy consumption 

DF discount factor 

LCC lifecycle cost 

NES national energy savings 

NIA national impact analysis 

NODA Notice of Data Availability 

NOPR Notice of Proposed Rulemaking

NPV net present value 

OMB Office of Management and Budget 

PVS present value of operating cost savings 

TSD technical support document 
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UEC unit energy consumption